Pay Per Click Metrics - page 3

by Steve Loszewski, 3/30/2006

Conversion Rate

Keyphrases, ads, and landing pages all affect conversion rates. An advertiser should always be trying to improve conversion rates. This statement needs some qualification. An advertiser can often increase conversion rates by writing ad text that qualifies the user as someone who is more likely to make a transaction - essentially lowering click through rates. If a keyphrase-ad-landing page combination is unprofitable, this is a good strategy. If a keyphrase-ad-landing page combination is profitable, this might not be a good strategy. In this case increasing the conversion rate could increase return on investment, but decrease overall profit. Similar reasoning exists for keyphrases. An advertiser could be missing out on good advertising opportunities if they are too selective, not broad enough, in their keyphrase list.

This aside, given constant keyphrases and ads, an advertiser should always be modifying a site to increase conversion rates. This means creating content that is directly relevant to what the user is searching for and easing the transaction process. This entails establishing trust with the user and making the user confident that he/she is getting what they want at a cost that is better than what they'd get anywhere else.

Conclusion

Conversion rate, cost per click, and click-through rate are three major metrics to gauge the success of or to improve a pay per click campaign. Most advertisers don't look at these metrics correctly or get sucked into the belief that they're interdependent. These metrics should be treated separately for increasing the profitability of a campaign. How they should be treated depends on the profitability of the campaign's keyword-ad-landing page combinations.

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About the author

Manages pay per click campaigns for Pure Visibility Search Engine Marketing.

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